Over 45,000 people took out equity release plans in 2019 – proving that the sector continues to grow as consumers realise the benefits they can reap from Lifetime Mortgages.
But why do people choose to take out equity release plans? Let’s take a look at the top reasons people opted for equity release in 2019.
The cost of living continues to rise – and major life events like university, weddings, and buying a home are more expensive than ever before.
Twenty-eight per cent of people use their tax-free lump sum from their equity release plan to help their loved ones achieve financial security. Whether that’s contributing to university fees or gifting some money towards a house deposit, it’s a great way to help your family with their immediate financial needs.
Leaving an inheritance is always a generous act – but it’s even better if you can see your family make the most of it before you pass away. Equity release lets you spend your tax-free lump sum as you wish – including helping your loved ones onto the property ladder, contributing towards a wedding, or even celebrating the birth of a new grandchild.
You can use your equity release money to pay off your existing mortgage and other debts. This gives you financial freedom into your retirement – so you can live comfortably and without worry.
A Lifetime Mortgage doesn’t have to be repaid until either you pass away or move into long-term care. You can choose to make payments (either interest-only or interest and loan repayments) to reduce the amount owed by your estate. However, you don’t have to do this.
That means you can use your equity release scheme to inject cash into your daily life – and not have to worry about making monthly debt repayments.
The full State Pension is £8,800 a year – but couples need at least £26,000 a year to live well in their retirement. If you want to take holidays or buy a luxury good here and there, that number skyrockets to £42,000 a year.
Personal and workplace pensions offer one way of funding your retirement – but your options here can be limited and you’re also taxed on the income (after the first 25%). Equity release gives you tax-free cash to spend as you wish, when you want.
Last year, 64% used their equity release to fund home improvements on their property. This has a two-fold benefit: you get to update and enjoy your home even more – and you can also make adaptations to help you live independently for as long as possible.
You could even add value to your home if you choose to increase the space with an extension or conservatory. Did you know that adding a sun room to your home adds an average of 5% to your home’s value? (And that rockets to 12% for prime London properties, too!).
If you want to enjoy a comfortable retirement, pay off your debts, or help your family onto the property ladder, equity release could be the answer.
It’s not suitable for everyone, though – so make sure you’re eligible by giving us a call today on 0800 680 0356. If our advisors think equity release could be the best solution for your retirement plans, one of our experts will call you back for an in-depth chat about your options.